Finance Debt

Great Advice For Consolidation Debt Loan Student

Published at 04/03/2012 16:26:11


Facing ghosts of the past inform of student loans can be a nightmare, especially if you had to apply for more than one loan to meet the costs. Instead of waiting for the outstanding debt to accumulate which in turn damages you credit report, it is wise to take a proactive action by opting for student loan debt consolidation. Student loan consolidation has become very common among many students who are realizing that it is the fastest way of debt redemption. As a student, you basically have to methods of consolidating your debts, private or federal loans. The cheapest approach is federal loans which charge lower interest rates. Such loans also come with a fixed rate of interest which helps students to plan and make timely payments. Another major incentive is the fact that the student gets a new lower rate and an extended repayment plan.

Step 1

Student loan debt consolidation offers you the following benefits:
• Lower monthly fees, it is estimated that with a federal loan you can lower your loan by about 60 percent; this is a major relief for students.
• Lower rated for students who consolidate loans within the grace period. For instance, Stafford loans are generally 5 percent lower for students in their first six months.

Step 2

• Fixed rates of interests that come with these federal loans and help students to plan for their monthly payments in line with their budgets. Variable rates of interest are very unpredictable and have a tendency of always shooting upwards.
• Student loan debt consolidation saves you a lot of time; it is easier to pay off one lender than having to pay multiple loan providers with several checks. Federal student loan debt consolidation offers more flexible modes of payment. It is possible to extend your loan up to thirty years and still enjoy low interest rates.

Step 3

• Federal loans do not charge penalties for pre-paying. You can choose to settle your loan in one payment without paying an extra fee in form of penalties. Private student loan debt consolidation however attracts fees for early payment.

Step 4

What payment plans are available for student loan debt consolidation?
• Level payment plan: under this plan, the payments are fixed over the entire duration of your plan; the average minimum is about $50.
• Graduated plan: payments under this plan are initially lower but they increase over time. This plan is ideal for people who expect their incomes to increase as time progresses. Making initial small payments attract higher interest charges in the long run.

Step 5

• Income sensitive student loan debt consolidation plan: payments are adjusted depending on the total household income. If you are currently struggling to make ends meet, you should consider this plan until you get back on your feet.
• Extended plan: this is for people with a student loan of over $30,000; the repayment period under this plan extends up to thirty years.


It is advisable to carefully look at the student loan debt consolidation plans and get the best to suit your personal needs.

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